Treaty of Trade and
Transit Between the Government of India and His Majesty's
Government of Nepal

Kathmandu, 11 September 1960

Whereas the Government of India and His
Majesty's Government of Nepal (hereinafter referred to'as
the Contracting Parties).

Being animated by the desire to strengthen
economic cooperation between the two countries, and convinced
of the benefits likely to accrue from the development of
their economies towards the goal of a Common Market,

HAVE RESOLVED to conclude a Treaty of
Trade and Transit in order to expand the exchange of goods
between their respective territories, encourage collaboration
in economic development and facilitate trade with third
countries.

They have for this purpose appointed as
their plenipotentiaries the following persons, namely,

who, having exchanged their full powers
and. found them good and in due form, have agreed as follows:

TRADE

Article I

The Contracting Parties shall promote
the expansion of mutual trade in goods originating in the
two countries and shall to this end 1. Came into force from
1 November, 1960 endeavour to make available to each other
commodities which one country needs from the other. The
Contracting Parties shall further take care to avoid to
the maximum extent practicable diversion of commercial traffic
or deflection of trade.

Article II

Subject to such exceptions as may be mutually
agreed upon, goods originating in either country and intended
for consumption in the territory of the other shall be exempt
from customs duties and other equivalent charges as well
as from quantitative restrictions.

Article III

Notwithstanding the foregoing provisions,
either Contracting Party may maintain or introduce such
restrictions as are necessary for the purpose of

(a) protecting public morals,

(b) protecting human, animal and plant
life,

(b) safeguarding national treasures,

(d) safeguarding the implementation of
laws relating to the import and export of gold and silver
bullion,

(e) safeguarding such other interests
as may be mutually agreed upon.

Article IV

Payment for goods and services between
the two countries will continue to be made as heretofore.

Article V

The trade of the Contracting Parties with
third countries shall be regulated in accordance with their
respective laws, rules and regulations relating to imports
and exports.

Article VI

Payment for transactions with third countries
will be made in accordance with the respective foreign exchange
laws, rules and regulations of the two countries. The Contracting
Parties agree to take effective steps, in cooperation with
each other, to prevent infringement and circumvention of
the laws, rules and regulations of either country in regard
to matters relating to foreign exchange.

TRANSIT

Article VII

Goods intended for import into or export
from the territories of either Contracting Party from or
to a third country shall be accorded freedom of transit
through the territories of the other party. No distinction
shall be made which is based on the flag of vessels, the
place of origin, departure, entry, exit. destination or
ownership of goods.

Article VIII

Goods (including baggage) shall be deemed
to be in transit across the territory of a Contracting Party
when the passage across such territory, with or without
transhipment, warehousing, breaking bulk or change in the
mode of transport, is only a portion of a complete journey
beginning and terminating beyond the frontier of the Contracting
Party across whose territory the traffic passes. Traffic
of this nature is termed "traffic in transit."

Article IX

Traffic in transit shall be exempt from
customs duty and from all transit duties or other charges
imposed in respect of transit, except reasonable charges
for transportation and such other charges as are commensurate
with the costs of services rendered for the supervision
of such transit.

Article X

The procedure to be followed for traffic
in transit to or from third countries is laid down in the
Protocol hereto annexed. Except in case of failure to comply
with the procedure prescribed, such traffic in transit shall
not be subjected to unnecessary delays or restrictions.

Article XI

Traffic in transit through the territories
of one Contracting Party from one place to another in the
territories of the other Party shall be subject to such
arrangements as may be mutually agreed upon.

GENERAL

Article XII

Nothing in this Treaty shall affect any
measure which either of the Contracting Parties may be called
upon to take in pursuance of general international conventions
to which it is a party or which may be concluded hereafter
relating to the transit, export or import of particular
kinds of articles such as opium or other dangerous drugs
or in pursuance of general conventions intended to prevent
infringement. of industrial, literary or artistic property
or relating to false marks, false indications of origin
or other methods of unfair competition.

Article XIII

The Contracting Parties shall take appropriate
measures to ensure that the provision's of this Treaty are
effectively and harmoniously implemented and to consult
with each other periodically so that such difficulties as
may arise in its implementation are resolved satifactorily
and speedily.

Article XIV

This Treaty, which replaces the Treaty
of Trade and Commerce between the two countries of 31st
July, 1950, shall come into force on 1st November, 1960.
It shall remain in force for a period of five years. It
shall continue in force for a further period of five years
thereafter, subject to such modification as may be agreed
upon, unless terminated by either party by giving notice
of not less than one year in writing.

DONE in duplicate in English, Hindi and
Nepali, all the texts being equally authentic, at Kathmandu
on September 11, 1960, corresponding to the twenty seventh
day of Bhadra, Bikram Sambat two thousand and seventeen.
In case of doubt, the English text will prevail.

(Signed) HARISHWAR DAYAL

For the Government of India.

(Signed) RAM NARAYAN MISHRA

For His Majesty's Government of Nepal.

PROTOCOL

(Vide Article X)

1. All Traffic in Transit shall

(i) be duly entered at the proper Customs
Houses at the points of entry and exit,

(ii) pass uia routes prescribed for such
traffic,

(iii) comply with the following procedure
:

(a) The import/export licence authorising
importation/ exportation of the goods to or from the territory
of one Contracting Party shall be produced before the Customs
Officer at the point of entry of the goods in the territory
of the other Contracting Party (hereinafter referred to
as "Country of Transit").

(b) Except in the case of goods imported
or exported by Their Majesties, other privileged members
of the Royal Family of Nepal, and by His Majesty's Government
of Nepal (including those received by its foreign aid),
a bond with suitable guarantee shall be executed by the
importer/exporter or by his authorised agent guaranteeing
and undertaking that the goods shall not be diverted en
route.

(c) An importer/exporter or his authorised
agent shall produce within a specified period satisfactory
evidence to the appropriate Customs Officer of the country
of transit to the effect that the goods have duly passed
into the territory of the other.

(d) Any other detailed regulations which
may be prescribed in mutual consultation by the Contracting
Parties shall also be complied with.

2. Wherever it becomes necessary to break
bulk in respect of a consignment in transit, such breaking
shall be done only under the supervision of the appropriate
Customs Officer of the Party in whose territory such break
of bulk takes place.

3. Warehousing of all consignments shall
be subject to the relevant laws and regulations of the Party
in whose territory such warehousing occurs.

4. To facilitate the movement in transit
of goods through India to and from Nepal, the Government
of India agree to arrange with the Commissioners of the
Port of Calcutta to assign a separate shed in the Calcutta
Port area wherein all goods in transit (other than hazardous
goods) may be stored pending onward transmission to or from
Nepal in compliance with the procedures prescribed.

5. The Government of India taking note
of the desire on the part of His Majesty's Government of
Nepal to appoint Customs Liaison Officers at the port of
Calcutta and Barauni railway station with a view to facilitating
in collaboration with the appropriate Indian authorities,
the smooth working of the procedures prescribed for the
regulation of Traffic in Transit agree to accord to these
officers all appropriate countries and reasonable facilities
for the due discharge of these functions including access
to examination centres, transit sheds, or transhipment points
in Calcutta or Barauni railway station, in which goods in
transit to and from Nepal are stored, opened for examination
or transhipped. Customs examination of goods in transit
at Calcutta and Barauni will normally be carried out in
the presence of the Nepalese Liaison Officers.

6. The Government of India will similarly
appoint, where necessary' Customs Liasion Officers in Nepal
for discharging similar functions particularly in respect
of goods carried to Nepal from a customs port in India in
transit by air. His Majesty's Government of Nepal shall
extend similar courtesies and accord similar facilities
to such officers.

Sd./ HARISHWAR DAYAL

For The Government of India

Sd./ RAM NARAYAN MISHRA

For His Majesty's Government of Nepal

-----------------

His MAJESTY'S GOVERNMENT OF NEPAL

EXCELLENCY:

In the course of the discussions which
resulted in the conclusion of the Treaty of Trade and transit
between the Government of India and His Majesty's Government
of Nepal signed today, the measures necessary to achieve
the objectives of the Treaty have been discussed and the
following understanding was reached

1. With reference to Articles I &
V, while the Contracting Parties may follow independent
policies on trade with third countries, it is understood
that if Nepal pursues a policy divergent from that of India,
there will be mutual consultations so as to ensure that
there is no flow into India of goods imported from third
countries.

2. In regard to Article II it is agreed
that :

(a) His Majesty's Government of Nepal,
having regard to their requirements of raising resources
for the economic development of Nepal, may continue to levy
existing import and export duties on goods imported from
or exported to India. The rates of such duties shall not,
however, exceed those. applicable to imports from the exports
to third countries. It is understood that there will be
no such duties on Government to Government transactions.

(b) The existing arrangements between
the Contracting Parties for the refund to His Majesty's
Government of Nepal of central excise duties on goods exported
from India to Nepal are not affected.

(c) In order to assit Nepal's indjustrial
development the Government of India agree that His Majesty's
Government may impose protective duties or quantitative
restrictions on such goods as may be produced by newly established
industries in the country.

3. In regard to clause (e) of Article
III, it is understood that either Party may, in agreement
with the other, take measures, if that becomes necessary,
to secure a balance in mutual payments, to prevent the smuggling
of their currencies from or to third countries, to prevent
the re-entry into its territory of goods passed in transit
or to prevent the re-export of goods exported to the territory
of the other.

4. Imports from third countries will normally
be permitted by either country only against its own foreign
exchange resources except for capital goods, spares and
industrial raw materials which may be imported against foreign
investment. Neither party will, however, issue any import
licence on the basis that the foreign exchange required
for it will be arranged by nationals of the other party.

With the reference to Article XIII of
the Treaty, it has been agreed that inter-governmental consultations
shall for the time being be carried out through normal diplomatic
channels on the request of either Party at a place and time
to be mutually agreed upon, the meetings being held within
30 days of the request.

I shall be grateful if you would kindly
confirm that the above correctly sets out the understanding
reached between us.

Accept, Excellency, the assurances of
my highest consideration.

Sd./- RAM NARAYAN MISHRA

Minister for Commerce and Industry,
His Majesty's Government of Nepal
September 11, 1960

His Excellency Shri HARISHWAR DAYAL
Ambassador Extraordinary and Plenipotentiary at the Court
of Nepal Indian Embassy Kathmandu.

___________________

AMBASSADOR OF INDIA

Kathmandu, September 11, 1960

Bhadra 20, 1882 (Saka)

EXCELLENCY:

I write to acknowledge receipt of your
letter of today's date which reads as follows :

(Not reproduced)

I confirm that the foregoing correctly
sets out the understanding reached between us.

Accept, Excellency, the assurances of
my highest consideration.

Sd./ HARISHWAR DAYAL
Ambassador of India.

His Excellency Shri Ram Narayan Mishra,

Minister for Commerce & Industries,
His Majesty's Government of Nepal, Kathmandu.

MEMORANDUM

1. In pursuance of the provisions of sub-clause
(d) of clause (iii) of Para 1 of the Protocol to the Treaty
of Trade and Transit, His Majesty's Government of Nepal
and the Government of India agree that the following detailed
procedures shall apply to goods in Transit :

IMPORT PROCEDURE

1. When the goods are imported for Nepal
in transit through India the importer or his agent shall
be required to observe the following procedure at the Indian
Port of importation :

(i) Transit of the goods meant for Nepal
shall be allowed against Nepal Government licences permitting
goods to be carried into Nepal.

NOTE: His Majesty's Government of Nepal
will arrange to supply, through the Indian Embassy at Kathmandu,
to the Collectors of Customs concerned, the specimen signature
of officer/officers who sign Nepal Government import/export
licences. It will also arrange to have one copy each of
all licences issued by it, sent direct to the Collectors
of Customs concerned for his information.

(ii) The importer or his agent shall make
the following declaration on the relative Bill of Entry
at Indian Custom House :

"I/We declare that the goods entered
herein are the goods in respect of which the Nepal Import
licence No ................ dated has been issued and I/We
further declare that the goods are intended for import into
Nepal within the prescribed time-limit--vide Rule 6-and
shall not be diverted en-route to any other country."

(iii) He shall furnish a bond to the Custom
House in the form prescribed by the Collector of Customs
with the surety of a bank of standing binding him to say
the duty and penalty for contravening Import Trade Control
restrictions on any portion of the consignment that is not
proved to have duly entered Nepal.

NOTE: Where an importer or his agent deals
or expects to deal with a series of consignments over a
period of time, a continuing general bond may betaken to
cover all such consignments instead of an individual bond
for every such consignment.

(iv) On compliance with the above provisions
he shall prepare an invoice in quadruplicate, in the prescribed
form, specifying therein the number of Nepal import licence,
the particulars of the goods, namely the marks, numbers,
weight of the packages, description and value of the goods,
etc., the route and also the border custom post (established
by agreement between His Majesty's Government of Nepal and
the Government of India) through which the goods will be
taken out of India to Nepal.

(v) Thereafter he shall present all the
four copies of the invoice and the Nepal import licence
at the Custom House together with a copy of the Bill of
Entry. The collector of Customs shall compare the copy of
the licence produced by the importer with that received
by him from His Majesty's Government of Nepal.

(vi) The four copies of the invoice shall
be examined by the Custom House to ensure that the particulars
stated in the invoice correspond in all material respects
to the particulars on the Nepal import licence. In order
to ensure that the goods conform to the description thereof
in the invoices the Indian Customs authorities will where
necessary, open for examination certain percentage of the
packages. There shall, however, be no opening for examination
of packages imported by Their, Majesties, other privileged
members of the Royal Family, by His Majesty's Government
of Nepal (including goods received by it as foreign aid),
by United Nations' and Diplomatic personnel and Missions
accredited to His Majesty's Government of Nepal.

(vii) The goods shall then be seated with
the Customs seal.

(viii) The goods will be loaded under
Customs supervision. Where Railway wagons are exclusively
provided for transit goods, the wagons will be sealed by
the Railways and/or the Customs.

NOTE 1 In the case of open wagons loading
heavy articles, such as cars, trucks, machinery, iron and
steel etc., sealing may be dispensed with.

NOTE 2 In the matter of priorities for
the booking of wagons, the. Railways would give the same
consideration to the transit goods to Nepal as to other
goods transported on behalf of Indian citizens.

NOTE 3 The transhipment of goods at Barauni
station from broad to meter gauge wagons will be done under
customs supervision and where Railway wagons are exclusively
provided for transit goods, the wagons will be sealed by
the Railways and/or the Customs.

2. The original copy of the invoice duly
completed and registered by the Custom House will be handed
over to the importer or his agent along with the Nepal import
licence, suitably endorsed by the Custom House. The duplicate
and triplicate copies of the invoice shall be forwarded
simultaneously by the Indian Custom House to the authorised
officer of the Land Customs and Central Excise in charge
of the border Customs post mentioned in the invoice. The
quadruplicate copy shall be retained in the Indian Custom
House.

3. On arrival of the goods at the border
Customs post the goods shall be presented by the importer
or his agent to the authorised officer of Land Customs and
Central Excise along with the original copy of the invoice.

4. The authorised officer of Land Customs
and Central Excise shall :-

(i) compare the original copy of the invoice
with the duplicate and the triplicate copies received by
him from the Indian Custom House;

(ii) examine the seals on the packages,
and identify the packages with the particulars shown on
the invoice;

(iii) if the particulars on the original
copy of the invoice agree with the particulars on the duplicate
and triplicate copies and the seals are intact, and the
packages are satisfactorily identified, allov~ the goods
to proceed and certify accordingly on each of the three
copies of the invoice;

NOTE: In case the seals are not found
intact, he may reseal the packages with his own seal, after
satisfying himself as to the identity of the packages and
the goods from the particulars shown on the invoice, and
if necessary by opening and examining the goods themselves.
It should not, however, be necessary to detain the entire
consignment if seals on some packages are found broken.
After ascertaining the shortages and indicating these on
the relevant Nepal invoices, goods should be allowed to
go forward without delay;

(iv) On compliance with the above provisions
he shall prepare an invoice in quadruplicate, in the prescribed
form, specifying therein the number of Nepal import licence,
the particulars of the goods, namely the marks, numbers,
weight of the packages, description and value of the goods,
etc., the route and also the border custom post (established
by agreement between His Majesty's Government of Nepal and
the Government of India) through which the goods will be
taken out of India to Nepal.

(v) Thereafter he shall present all the
four copies of the invoice and the Nepal import licence
at the Custom House together with a copy of the Bill of
Entry. The collector of Customs shall compare the copy of
the licence produced by the importer with that received
by him from His Majesty's Government of Nepal.

(vi) The four copies of the invoice shall
be examined by the Custom House to ensure that the particulars
stated in the invoice correspond in all material respects
to the particulars on the Nepal import licence. In order
to ensure that the goods conform to the description thereof
in the invoices the Indian Customs authorities will where
necessary, open for examination certain percentage of the
packages. There shall, however, be no opening for examination
of packages imported by Their, Majesties, other privileged
members of the Royal Family, by His Majesty's Government
of Nepal (including goods received by it as foreign aid),
by United Nations' and Diplomatic personnel and Missions
accredited to His Majesty's Government of Nepal.

(vii) The goods shall then be seated with
the Customs seal.

(viii) The goods will be loaded under
Customs supervision. Where Railway wagons are exclusively
provided for transit goods, the wagons will be sealed by
the Railways and/or the Customs.

NOTE 1: In the case of open wagons loading
heavy articles, such as cars, trucks, machinery, iron and
steel etc., sealing may be dispensed with.

NOTE 2: In the matter of priorities for
the booking of wagons, the. Railways would give the same
consideration to the transit goods to Nepal as to other
goods transported on behalf of Indian citizens.

NOTE 3: The transhipment of goods at Barauni
station from broad to meter gauge wagons will be done under
customs supervision and where Railway wagons are exclusively
provided for transit goods, the wagons will be sealed by
the Railways and/or the Customs.

2. The original copy of the invoice duly
completed and registered by the Custom House will be handed
over to the importer or his agent along with the Nepal import
licence, suitably endorsed by the Custom House. The duplicate
and triplicate copies of the invoice shall be forwarded
simultaneously by the Indian Custom House to the authorised
officer of the Land Customs and Central Excise in charge
of the border Customs post mentioned in the invoice. The
quadruplicate copy shall be retained in the Indian Custom
House.

3. On arrival of the goods at the border
Customs post the goods shall be presented by the importer
or his agent to the authorised officer of Land Customs and
Central Excise along with the original copy of the invoice.

4. The authorised officer of Land Customs
and Central Excise shall :-

(i) compare the original copy of the invoice
with the duplicate and the triplicate copies received by
him from the Indian Custom House;

(ii) examine the seals on the packages,
and identify the packages with the particulars shown on
the invoice;

(iii) if the particulars on the original
copy of the invoice agree with the particulars on the duplicate
and triplicate copies and the seals are intact, and the
packages are satisfactorily identified, allov~ the goods
to proceed and certify accordingly on each of the three
copies of the invoice;

NOTE: In case the seals are not found
intact, he may reseal the packages with his own seal, after
satisfying himself as to the identity of the packages and
the goods from the particulars shown on the invoice, and
if necessary by opening and examining the goods themselves.
It should not, however, be necessary to detain the entire
consignment if seals on some packages are found broken.
After ascertaining the shortages and indicating these on
the relevant Nepal invoices, goods should be allowed to
go forward without delay;

(iv) deliver the original copy duly endorsed
to the importer or his agent alongwith the goods for presentation
to the Nepalese Officer at the corresponding Nepalese border
customs post and send the duplicate duly endorsed to the
Collector of Customs at the port through which the goods
were imported.

NOTE: The duplicate copy should be despatched
to the Collector of Customs by the authorised officer of
Land Customs and Central Excise within 24 hours of the passing
of the goods through the Indian border Customs post;

(v) send the triplicate copy duly endorsed
to the Nepalese customs officer at the corresponding Nepalese
border customs post through the Nepalese representative
deputed for the purpose, for advance information, and shall
retain that copy after it has been returned duly endorsed
by him.

5. The Nepalese Customs Officer shall
:

(i) deal with the goods in such manner
as may be directed by His Majesty's Government of Nepal;

(ii) endorse a certificate over his signature
and authenticate it under customs stamp on the original
copy of the Nepal import licence and invoice that the goods
have reached Nepal with the Indian Customs seals intact
and that the packages correspond in all respects with the
particulars shown in the invoice and in all material respects
with the Nepal import licence and that the goods have been
cleared from Nepalese customs custody for entry into Nepal;

(iii) return the original copy of the
invoice and the original copy of the Nepal import licence
to the importer or his agent;

(iv) return the triplicate copy duly endorsed
to the authorised officer of Land Customs and Central Excise
after the goods have crossed the Nepalese border customs
post.

6. In order to secure the cancellation
of the bond furnished under rule 1(iii) the importer or
his agent must present an application to that effect to
the Collector of Customs, supported by the original copy
of the invoice duly certified by the authorised officer
of Land Customs and Central Excise and the Nepalese Customs
Officer to the effect that the goods have been cleared from
Nepalese Customs custody for entry into Nepal with the Indian
Customs seals intact. Tl~e original invoice should reach
the Collector of

Customs concerned, not later than six
months after the date on which the invoices were completed
at the Indian port of importation, or such extended time
as the Collector of Customs might certify as being due to
circumstances beyond the control of the importer.

7. Before allowing the cancellation of
the bond, the Collector of Customs shall compare the original
copy of the invoice received from the importer with the
duplicate copy received from the authorised officer of Land
Customs and Central Excise.

8. The procedure outlined above will apply
mutatis mutandis to goods imported into India from abroad
by sea or by air and meant for being sent in transit therefrom
to Nepal by air.

EXPORT PROCEDURE

1. When goods of Nepalese origin, despatched
from the border customs posts (established by agreement
between His Majesty's Government of Nepal and Government
of India) are cleared from Nepalese customs custody and
are exported for re-export to foreign countries in transit
through India, the exporter or his agent shall be required
to observe the following procedure at the corresponding
Indian border customs post :

W He shall prepare an invoice in quadruplicate
in the prescribed form, specifying therein the particulars
of the goods namely the marks, numbers and weight of the
packages, description and value of the goods etc., the number
of the Nepal export licence and also the route through which
the goods will pass from the point of entry to the port
of exit. The invoice shall have been verified and certified
accordingly by the Nepal Customs Officer. The exporter or
his agent shall make the following declaration thereon :

"I/We declare that the goods entered
herein are of Nepalese origin, exported from Nepal by virtue
of Nepal export licence No dated and are intended for export
to (name of foreign country) within the prescribed time
limit-vide Rule 6-and shall not be diverted en-route to
any other country."

(ii) He shall present all four copies
of the invoice duly certified over his signature by the
Nepal Customs Officer and authenticate it by customs stamp
to the authorised officer of Land Customs and Central Excise
at the border Customs post along with the goods.

(iii) With regard to goods, the import
of' which into India is prohibited, restricted or subject
to excise duty, he will fur nish the authorised officer
of the Land Customs and Central Excise at the Indian border
customs post with a bond in the form prescribed by the Collector
of Land Customs with a surety of a Bank of standing, undertaking
to produce a certificate from the Custom House at the port
of exit that the goods have been duly shipped.

NOTE : 1. Such bonds shall not be required
in respect of other commodities.

2. Where an exporter or his agent deals
or expects to deal with a series of consignments over a
period of time, a continuing general bond may be taken to
cover all such consignments instead of an individual bond
for every such consignment. .; I

2. After the packages containing the goods
have been examined and the correctness of the contents and
description certified by the authorised officer of the Land
Customs and Central Excise at the border Customs post, the
goods shall be sealed by him and released for onward transmission
to the port of exit via the route declared.

3. The original copy of the invoice shall
be handed over to the exporter; the duplicate and triplicate
copies of invoice shall be forwarded simultaneously to the
Collector of Customs at the port of exit. The quadruplicate
copy shall be retained by the authorised officer of Land
Customs and Central Excise.

4. On arrival of the goods at the port
of exit the exporter or his agent shall produce the original
copy of the invoice to the Collector of Customs or an Officer
appointed by him for the purpose. The goods will remain
under customs control until they are duly exported after
filing an export Shipping Bill.

5. The Collector of Customs or the Officer
appointed by him shall (i) compare the original copy of
the invoice with the duplicate and triplicate copies received
by him from the authorised officer of Land Customs and Central
Excise;

(ii) examine the seals on the packages
and identify the packages with the particulars shown on
the invoice;

(iii) if' the particulars on the original
copy of the invoice agree with the particulars on the duplicate
and triplicate copies and the seals are intact and the packages
are satisfactorily identified, allow the goods to be ship
ccordingly on each of the three copies of the invoice;

NOTE: In case the seals are not found
intact, he may re-seal the packages with his own seal after
satisfying himself as to the identity of the packages,-
and the goods from the particulars shown on the invoice,
and if necessary by opening and examining the goods themselves.
It should not, however, be necessary to detain the entire
consignment if the seals on some packages are found broken.
After ascertaining the shortages and indicating these on
the relevant Nepal invoices, goods should be allowed to
go forward without delay.

(iv) retain the triplicate copy and return
the original duly endorsed to the exporter or his agent
and send the duplicate to the authorised officer of Land
Customs and Central Excise at the border.

6. In order to secure the cancellation
of any bond furnished under rule 1(iii) the exporter or
his agent must present an application to that effect to
the authorised officer of Land Customs and Central Excise,
supported by the original invoice duly certified by the
Collector of Customs at the port of exit to the effect that
the goods have been shipped with the Indian Customs seals
intact and that the packages correspond with the details
in the invoice. The original invoice should be received
at the Indian border Customs post not later than six months
from the date of completion of the invoice by the authorised
officer of Land Customs and Central Excise or such extended
time as the Collector of Land Customs and Central Excise
might certify as being due to circumstances beyond the control
of the exporter.

7. The authorised officer of Land Customs
and Central Excise at the Indian border Customs post shall
compare the original copy of the invoice produced by the
exporter with the duplicate copy received from the customs
house, before cancelling any bond furnished by the exporter.
He shall report promptly to the Collector of Land Customs
and Central Excise concerned, the detail of all cases where
the cancellation of the bonds has not been secured within
the prescribed period.

H. As regards opening for customs examination
of such goods in transit, the Government of India agree
that it should be reduced to the minimum (ordinarily not
exceeding 3 per cent) consistent with the necessity of the
Customs Officer satisfying himself that the goods imported
or about to be exported are fully in accordance in respect
of quantity, description and value with those described
in the respective Nepal invoice and that they also otherwise
conform with import/export licence issued by His Majesty's
Government of Nepal to cover their importation or exportation
as the case may be.

III. In respect of goods imported by Their
Majesties other privileged members of the Royal family,
by His Majesty's Government of Nepal (including goods received
by it as foreign aid), and by the United Nations' and Diplomatic
personnel and Missions accredited to His Majesty's Government
of Nepal, special priorities will be afforded in the matter
of compliance with the requisite formalities. As regards
unaccompanied baggage of passengers who have already passed
in through transit to Nepal, priority of treatment will
be similarly accorded provided the Customs Officer is satisfied
that the articles imported as such baggage are intended
for the bonafide personal use in Nepal of that passenger.

IV. His Majesty's Government of Nepal
may wish to employ a special agent for the purpose of observance
of these formalities and for handling and transmission of
goods in transit at the port of Calcutta. It is agreed that
facilities for the due discharge of these functions will
be made available to such an agent by the Customs authorities
at Calcutta in terms of Sections 4 and 203 of the Indian
Sea Customs Act, 1878.

V. With regard to Article XI of the Treaty
of Trade and Transit the procedure agreed upon between the
representatives of the Governments of India and Nepal on
the 18th May, 1954, to regulate the transmission of goods
of Nepalese origin from the one part of Nepal to another
part through Indian territory shall apply mutatis mutandis
in respect of all articles subject to import, export or
excise duty and or prohibitions or restrictions on their
import into or export from India.

For the Government of India.
Sd./- B.N. BANERJEE
Joint Secretary to the Government of India,

For His Majesty's Government of Nepal.
Sd./- R.P. JOSHI
Secretary to His Majesty's Ministry of Finance. Government
of Nepal,
11-9-1960